Medicare payments for Part B services and evaluation and management services both increased by more than 40 percent during the first decade of the new millennium, according to a study coordinated by the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG).

Medicare payments for Part B goods increased by 43 percent, from $77 billion to $110 billion, from 2001 through 2010, the report indicated. Payments for evaluation and management (E/M) services spiked by 48 percent - from $22.7 billion to $33.5 billion - during that time.

E/M services traditionally have been vulnerable to fraud and abuse; two healthcare entities paid more than $10 million apiece in 2009 alone to settle allegations that they fraudulently billed Medicare for E/M services. But the Centers for Medicare & Medicaid Services (CMS) found evidence that went beyond the anecdotal, determining that certain types of E/M services were tied to more improper payments than any other type of Medicare Part B service type in 2008.

The HHS OIG described the results of the study as the first in a series of evaluations of E/M services. Subsequent evaluations will determine the appropriateness of Medicare payments for E/M services and the extent of documentation vulnerabilities in E/M services.

The study was conducted using the Part B Analytics Reporting System, through which the HHS OIG scrutinized E/M services provided to beneficiaries to determine coding trends. Using Part B Medicare claims data, physicians' E/M claims were analyze to identify physicians who consistently billed higher-level (more complex and more expensive) E/M codes in 2010 (the study did not determine whether the E/M claims from these physicians were inappropriate).

The study ultimately revealed that, from 2001 to 2010, physicians increased their billing of higher-level E/M codes for all types of E/M services. Approximately 1,700 physicians, practicing in nearly all states and representing similar areas of specialty, were identified as consistently billing higher-level E/M codes. Those physicians also treated beneficiaries of similar ages and with similar diagnoses as those treated by other physicians.

CMS concurred with the HHS OIG's recommendations to continue to educate physicians on proper billing for E/M services and to encourage its contractors to review physicians' billing for E/M services. CMS partially concurred with a third recommendation as well: to review physicians who bill higher level E/M codes for appropriate action.